Bitcoin dropped sharply on Friday, hitting its lowest point in six months, as traders pulled away from risky investments. This sell-off was triggered by decreasing expectations that the U.S. Federal Reserve will cut interest rates in December.

Earlier this month, there was a strong belief—around 90% probability—that the Fed would lower rates in December. That confidence has now dropped to just 40%. Investors have become more cautious as more Fed officials suggest they may keep rates steady instead of easing them.

As of Friday afternoon, Bitcoin was down 2.3%, trading at $96,564. Earlier in the day, it fell to $95,885.33—its lowest level since May 7. Ethereum, the second-largest cryptocurrency, remained mostly unchanged at $3,175.22 after briefly dipping to a 10-day low.

U.S. stock markets also saw selling pressure throughout the week but calmed slightly by Friday afternoon. Still, investors are nervous as they prepare for a wave of economic data next week following the recent government shutdown.

The decline in Bitcoin and other cryptocurrencies is part of a broader pullback in risky assets. Since peaking on October 7, the total value of the crypto market has dropped by over $1 trillion—a 24% decrease.

Experts say the mood around Bitcoin is still negative. One big concern is that long-time Bitcoin holders are cashing out. Data from crypto research firms shows that these long-term investors have sold about 815,000 Bitcoin in the past month—a record high since January 2024.

At the same time, fears are rising that some tech stocks linked to artificial intelligence may now be overvalued. Combined with uncertainty about future interest rate cuts, this is making investors more cautious across the board.

Key terms: Bitcoin price drop, cryptocurrency market crash, Federal Reserve interest rate decision, December rate cut probability, risk asset sell-off, Ethereum price, long-term Bitcoin holders selling, crypto market capitalization decline, AI stock bubble concerns.